See all we have on the Lean terms you want to learn about with our search function.
In accounting, last-in, first-out (LIFO) is a method of recording inventory. It is used to manage earnings in inflationary times. A last-in, first-out inventory system records the most recent price of materials as the cost, thereby making earnings reflect current prices. As a result, the older items, purchased earlier when Read more…
In statistical terms, the law of large numbers is a theorem that postulates that as the size of the sample of a random variable increases, its average will approach the theoretical average. In layman’s terms, the law of large numbers simply says that over time, the more times you roll Read more…
Layoffs, also called downsizing, are terminations of employees because of a lack of work. Layoffs pose a significant risk to Lean and other continuous improvement efforts. If employees get the idea that helping make improvements will cost them their jobs, then they will not want to make things better. Lean Read more…
Facility layouts come in three basic flavors. Unplanned Layouts. Some facilities are not arranged by any master plan. As new machines are needed, they are placed where they will fit. It is fairly uncommon for this method to be used throughout an organization, but many will have a few machines Read more…
In the most common definition, lead time is the time that elapses from when a customer places an order until the order is received. A variation on the definition of lead time looks at the time from when raw material arrives at a facility until the finished product ships. This Read more…
The military has a term called “commander’s intent”. It is a part of every mission briefing in which the commander describes success and the purpose behind what he or she wants to achieve. Unfortunately though, in any combat operation, there is a chance that a unit will find itself without Read more…
Leaders are the people who can envision a destination and inspire a group of others to join them on the journey to that goal. Leadership can be both formal and informal. In formal leadership roles, the leader is designated by someone of higher authority to act in that capacity. The Read more…
In short, leadership is the act of one person uniting and motivating others toward a common goal. Leadership is part natural (as in “natural-born”), but is greatly refined through training, practice, and constant learning. Confidence in oneself is a key component of leadership. While leadership is generally considered a positive Read more…
In its original definition, Lean is a form of continuous improvement that springs from the Toyota Production System (TPS). The term “Lean” was popularized in the landmark book, Lean Thinking. It focuses on improving flow, with a heavy emphasis on reducing inventory. Nowadays, though, there is also a broader definition. Read more…
Accounting is a necessary part of any business. It is critical to know if the actions a company is taking are making it profitable, or if they are causing the business to bleed cash. Accounting in the best of situations has its challenges. But the advent of Lean has made Read more…
The Lean Enterprise Academy is the UK equivalent to the Lean Enterprise Institute. The websites share a common look and feel and sell many of the same products. The Lean Enterprise Academy is a non-profit organization that aims “to develop and disseminate knowledge of lean thinking and lean practice.” It Read more…
LEI is a non-profit based in Boston, Massachusetts. It was founded in 1997 by James Womack. Its mission is listed on the website as “Make things better, through lean thinking and practice.” It does publishing and training events, and has a wealth of information on its website. One of LEIs Read more…
The Lean Global Network is a collaboration organization that boast the membership (as of 2020) of 30 institutes around the globe. This includes both the Lean Enterprise Institute in the US and the Lean Enterprise Academy in the UK. Its stated goal is “making things better by advancing lean thinking Read more…
A Lean implementation is the initial period of time when a company or organization is putting Lean in place. While most people look at it as a discrete event, in truth, there is often a long period where different parts of an organization are rolling out Lean. So, different departments Read more…
Lean manufacturing is the business philosophy of relentlessly eliminating waste to improve flow in a production environment. It has evolved into something far more widespread, and now Lean encompasses offices, construction, service, hospitals, and even government. While many people trace the roots of Lean manufacturing back to the Toyota Production Read more…
For many people, the term “Lean”, immediately brings to mind Lean manufacturing and images of the shop floor. While it is true that the origin of Lean certainly stems from these roots, continuous improvement principles have taken hold in the office, and are spreading at breakneck speed. The Lean office Read more…
Lean Six Sigma is the combination of Lean and Six Sigma into a single business philosophy. Lean is commonly thought of as a way to improve process speed. Six Sigma is primarily considered a quality tool. In truth, though, the two both share a lot of the same tools, and Read more…
Lean tools are the individual components of a Lean system. The most common Lean tools are: 5S Countermeasures Jidoka Kaizen Kanban Pareto (80/20) charts Process flow charts Poka yoke Pull /Just In Time Manufacturing Single Minute Exchange of Die (SMED) Standard Work Total Productive Maintenance Value stream maps Visual controls Read more…
Level loading, also known as heijunka, is the practice of using demand estimates to establish an average production level. By smoothing the demand, Lean companies can standardize their processes better, and can match their capacity to the current needs of the customer. Level loading on a mixed-model production line balances Read more…
Dr. Jeffrey K. Liker is one of the foremost experts on the Toyota Production System and is a prolific writer on the subject. His most famous work is The Toyota Way, but he has authored several additional books on related topics. Dr. Liker is a professor at the University of Read more…
A Likert Scale is the sequenced set of responses we frequently see on surveys. There are several common applications, such as how strongly you agree with a statement, or how satisfied you were with service. The latter is common in phone surveys after a customer service call. Example Likert Scale: Read more…
Line balancing is the act of balancing the cycle times of the workers on a production line to the takt time. When everyone has a cycle time that matches the takt time, work flows efficiently. If a line is not balanced, it either has waiting waste where team members are Read more…
A line shift is a synchronized movement of all the production work on an assembly line. It can be done in several ways. Manually, in which each person pushes their work to the next station on a signal. On an indexed moving line, in which the line moves and then Read more…
A line stop is exactly what it sounds like. A team member presses a button that prevents an assembly line from advancing. This typically happens for one of two main reasons. Someone discovered a quality issue. Someone was not finished with their work. Other reasons might include maintenance problems, misplaced Read more…
Little’s Law is a basic mathematics equation for calculating lead time. In the layman’s version, it says: Lead time = Number of units in WIP / Average Production Rate Let’s say you had 34 items in work-in-process, and you produce 10 per day. That means that it will take any Read more…
Low hanging fruit describes the “big bang for the buck” projects that can jump start a Lean implementation. They are the problems and opportunities that are easy to address with relatively little effort. The low hanging fruit are not likely to be the biggest payoff projects, but they are the Read more…
True kanban is a very formal, regimented system. Following that process in a disciplined manner is what makes it work as well as it does. If cards go missing or don’t get dropped on time, the system fails. But that same structure can also be a barrier to attempting it when there Read more…
Luck is the combination of events and circumstances that randomly impact an outcome. The more one can control those inputs, the more likely the result is to be a desired one. In a trip to Las Vegas, an individual has little impact on the outcome of games of chance. Roulette Read more…